Farm Price Supports

Report Outline
Price Supports And Agricultural Surpluses
Evolution of Federal Price-Support Policy
Proposed Remedies for Current Farm Ills
Special Focus

Price Supports And Agricultural Surpluses

Place of Supports in Eisenhower Program

The most formidable task immediately confronting the Eisenhower administration in the field of domestic policy is preparation before Congress meets in January of a new farm program that will be acceptable both politically and economically, that will hold the support of pivotal agricultural areas for the party in power without unduly obstructing administration efforts to balance the federal budget before the 1956 presidential election.

President Eisenhower told the Future Farmers of America, meeting in annual convention at Kansas City Oct. 15, that the goal of his administration is “a solidly based, comprehensive farm program that will remedy present difficulties in the existing laws—a program that will build markets, safeguard farm income, and protect consumers.” At the same time, he reminded his listeners of their wider interests as citizens and said “these wider interests must always be met satisfactorily before specific programs affecting any profession or calling can have validity.”

The only definite clue to administration planning given by the President at Kansas City was his statement that “the price-support principle must be a part of any future farm program.” Present law provides for mandatory support of six “basic” farm commodities (wheat, corn, cotton, tobacco, rice, peanuts) at 90 per cent of the parity price, and discretionary support of a limited number of other commodities at levels ranging down to 50 per cent of parity. The President promised faithful administration of the existing law, but its provision for rigid, high-level price supports expires at the end of next year. Under a new flexible-support system, now scheduled to come into effect in 1955, prices of the basic crops would be supported at levels ranging from 75 per cent to 90 per cent of parity—moving up or down in accordance with the relationship of prospective demand to prospective supply.